KARACHI: Pakistani traders have finalized several deals for import of some 0.6 million metric tons of wheat for domestic consumption. The Economic Coordination Committee (ECC) of the Cabinet, in its meeting in the third week of January, permitted the private sector for duty-free import of wheat to ensure food security and availability of wheat and wheat flour at a reasonable price across the country.
Accordingly, Pakistani traders (private sector) started procurement of the commodity from the international market in June this year and so far have finalized a number of deals for the import of some 0.6 million metric tons of wheat.
Overall some nine consignments, each of about 60,000 to 65,000 metric tons, have been booked by the Pakistani commodity importers, and the first shipment is most likely to arrive next week. Market sources said that the first consignment was purchased at some $219 to $220 per metric ton Cost and Freight (C&F).
Later, wheat prices in the international market were slightly increased, and the remaining shipments were booked at a price ranging from $224 to $240 per metric ton for August and September deliveries. The first wheat shipment is arriving in the country next week, and the second shipment is also expected to reach the country in the last week of this month.
MV YM Summit, carrying some 60,000 tons of wheat, is scheduled to reach the country on Wednesday. Unloading of 60,000 tons of wheat would take at least 10 days.
Sources said that the nine consignments had been booked by some four parties/consortiums of Pakistani traders, and all deliveries would be completed in September.
Muzzammil R. Chappal, a leading commodity trader and chairman of the Cereal Association of Pakistan (CAP), told Business Recorder that panic buying of the commodity and its prices would decline in the domestic market with the arrival of these consignments. Although the wheat consignments had not yet reached Pakistan, wheat prices across the country were gradually declining, he added.
"Prices of wheat grain got reduced by some Rs7 per kilogram to reach Rs46 per kilogram in Sindh, while in Punjab wheat prices also declined by Rs6.50 to Rs48.50 per kilogram," he said.
Muzzammil said that as per estimates Pakistan is facing over one million tons of wheat shortage this season due to lower crop output. During the FY20, wheat crop production was some 24.9 million tons as against the consumption of some 25-26 million that led to escalation of wheat and wheat flour prices in the country.
He appreciated the government's efforts for food security in the country and said that the federal government has taken import decision very timely and it will help stabilize the commodity prices in the local market. He said that Pakistani traders may book more consignments if prices remained stable in the international market and if the government did not directly procure the commodity from the international market. Following the directives of the federal government, the state-run grain trader - the Trading Corporation of Pakistan (TCP) - has also floated a wheat import tender for procurement of some 1.5 million tons of the commodity.
The tender was opened on August 19, and overall some nine bidders have submitted bids ranging from $233.85 per metric ton to $269.60 per metric ton for a minimum supply of 200,000 metric tons.
Copyright Business Recorder, 2020
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